EU ready to aid Greece with bilateral loans

BRUSSELS, March 19 (Xinhua) -- The European Union is ready to offer aid to Greece one day after Greek Prime Minister George Papandreou threatened to turn to the International Monetary Fund ( IMF) for help.

President of the European Commission Jose Manuel Barroso said in a statement issued on Friday night that the European Commission is ready to propose an instrument constituted by a system of coordinated bilateral loans.

President of European Commission Jose Manuel Barroso (R) and visiting  Greek Prime Minister George Papandreou attend a press conference after  their meeting at the EU headquarters in Brussels, Belgium, March 17, 2010.  (Xinhua/Wu Wei)

Barroso said that the instrument would be compatible with the no bail-out clause of the Eurozone and with strict conditionality.

But he said that creation of the instrument does not mean it would be activated immediately.

"Our objective is an instrument designed within the euro area, with conditions and management established by the euro area and its institutions," Barroso said.

"We cannot prolong any further the current situation," he said, adding "I urge the EU's leaders to agree on this instrument as soon as possible."

One day before Barroso issued the statement, Papandreou Thursday called for a clear aid plan for his debt-laden country and threatened to turn to the IMF for help.